Washington, DC, 30 September 2025 — A new report from Forest Trends’ Communities and Territorial Governance Initiative (CTGI) reveals that although there is growing recognition of the leadership of Indigenous Peoples (IPs) and Local Communities (LCs) in forest governance and climate finance, change remains too slow, too uneven, and too fragile. Without structural reforms, the world risks repeating the mistakes of the past decade—channeling billions of dollars into mechanisms that may tick boxes but fail to deliver real impact on the ground.
The State of Climate and Conservation Finance for Indigenous Peoples and Local Communities 2025 is the latest global analysis that brings together data on both climate and conservation finance flows directed to IPs & LCs. The report highlights both barriers and success stories, pointing to reforms urgently needed as the landmark USD $1.7 billion Forest Tenure Funders Group pledge ends in 2025. Our goal is to offer evidence of where the gaps remain, and to offer practical pathways toward more direct, effective, and equitable finance.
“The climate and conservation agendas cannot succeed if the people best positioned to protect forests and their biodiversity are left underfunded and under-recognized,” said Beto Borges, Forest Trends’ Director of CTGI. “This is not just a matter of fairness, it’s about effectiveness. Without reform, billions of dollars in climate finance risk failing to deliver real impact.”
Key findings include:
- Finance is growing but misaligned: Less than five percent of multilateral climate finance reaches IPs & LCs directly, despite billions of dollars pledged.
- Carbon markets fall short: The voluntary carbon market lacks clear requirements for revenue sharing with IPs & LCs, and benefits sharing is rarely reported.
- Systemic barriers persist: Bureaucratic grant processes, weak accountability, and discrimination prevent equitable access to funds for IPs & LCs.
- Alternative approaches show promise: Non-market approaches, such as Article 6.8 of the Paris Agreement, and community-led models, like biodiversity credits, can provide more stable, equitable support.
Recommendations include:
- Requiring carbon standards and funds to mandate equitable participation and revenue sharing.
- Supporting Indigenous- and community-led organizations’ interests on the ground, while ensuring intermediaries act as facilitators, not competitors, for access to funding.
- Strengthening innovative Indigenous-centered models, like impact bonds, biodiversity credits, and Payment for Ecosystem Services (PES), that actively reflect local values and that provide additional funding sources beyond credits and carbon.
- Recognizing the importance of non-monetary benefits, including tenure security and political empowerment.
“This report is both a diagnosis and a call to action,” said Borges. “We know that trust, tenure, and transparency work. Now is the moment to move from rhetoric to reality and ensure climate finance flows directly to communities on the frontlines.”
Download the report, State of Climate and Conservation Finance for Indigenous Peoples & Local Communities.
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Forest Trends is a civil society organization that works to conserve forests and natural ecosystems by promoting nature-based solutions, sustainable economies, and climate justice. Through its Communities and Territorial Governance Initiative (CTGI), Forest Trends has worked for over two decades in partnership with Indigenous Peoples and Local Communities to strengthen territorial governance, cultural preservation, and equitable access to climate finance. CTGI has a strong presence across Latin America and extensive experience in pioneering projects that intersect conservation, forest-based economies, and community leadership.